Asia Summary
Following the gains in the US equity markets, Asian indices are generally higher. Markets in Hong Kong have traded at an intraday 10-year high, while record highs have been seen for the equity markets in the Philippines. Equity markets in New Zealand trade at record high for 5 straight sessions. Markets in China and South Korea are still closed in observance of national holidays.
In Hong Kong, the banking sector has traded mostly higher. Shares of Standard Chartered have however underperformed, following reports that UK regulators are probing $1.4B in client fund transfers.
The gaming sector in Hong Kong has been weighed down amid the release of Macau tourism data for the Golden Week period.
Following yesterday’s retail sales induced declines, the Aussie has further weakened on today’s session. Earlier today, RBA official Harper did not rule out a rate cut amid the weaker retail sales data. The RBA last cut rates in Aug 2016.
Looking ahead, the US monthly payrolls report is in focus. Fed speakers are expected to include Bostic and Dudley. China’s Sept Caixin Services PMI may be released on Sunday Oct 8th, while Chinese markets will reopen next week
Key economic data
(HK) Hong Kong Sept Nikkei PMI: 51.2 v 49.7 prior
(JP) Japan Aug Labor Cash Earnings Y/Y: 0.9% v 0.5%e; Real Cash Earnings; 0.1% v 0.1%e
(JP) Japan Sept Official Reserve Assets: $1.27T v $1.27T prior
Speakers and Press
China
(CN) S&P: Amid the government’s deleveraging efforts, asset growth in the domestic banking sector has lagged growth of nominal GDP for the first time since 2012.
(CN) US Commerce Dept defers anti-dumping decision on imports of aluminum foil from China; to issue decision no later than Nov 30th
(HK) Macau Number of Mainland China Tourists from Oct 1-4 at 363.4K, -5.1% y/y
(HK) Hong Kong Securities and Futures Commission (SFC) plans to begin investor identification (ID) mechanism in early 2018 – HK Press
Other
(AU) Australia Senator Xenophon (independent) to quit and move to state politics
(AU) RBA Harper: Should a wider stalling of consumption occur, that could warrant rates response; NOT ruling out rate cut
(JP) Japan Fin Min Aso: Confirms to hold 2nd economic dialogue with US in Washington DC on Oct 16th**Note: On Sept 24th, it was reported that Aso was expected to skip the G20 and IMF meetings in Washington due to be held in Oct, as the US and Japan are expected to hold their 2nd economic dialogue on Oct 16th in Washington.
(JP) Tokyo Gov Koike (Party of Hope): Should freeze planned sales tax hike in 2019; To carry out ‘Yurinomics’ based on private-sector led economic revitalization, not relying excessively on monetary easing and fiscal spending.
(PH) BoJ signs $12.5B bilateral currency (FX) swap agreement with the Philippines, effective today
(TW) Taiwan said to consider raising electricity prices – Taiwanese Press
(SA) Saudi Arabia King: Remains keen on stability of global oil market
(SG) Singapore Central Bank (MAS): To issue semiannual monetary policy statement and Q3 GDP data on Oct 13th
IMF Lagarde: IMF supports accommodative policy for ECB and BoJ; more optimistic about global recovery
Asian Equity Indices/Futures (00:30ET)
Nikkei +0.3%, Hang Seng +0.4%, Shanghai Composite closed, ASX200 +0.9%, Kospi closed
Equity Futures: S&P500 flat ; Nasdaq flat, Dax +0.1% , FTSE100 +0.1%
FX ranges/Commodities/Fixed Income (00:30ET)
EUR 1.1686-1.1716; JPY 112.76-113.02; AUD 0.7743-0.7799; NZD 0.7091-0.7118
Aug Gold -0.2% at 1,270/oz; Aug Crude Oil -0.2% at $50.70/brl; Sept Copper -0.1% at $3.041/lb
GLD SPDR Gold Trust ETF daily holdings -0.4% to 851.1 metric tons
(AU) Australia sells A$700M in 2028 Bonds, avg yield 2.8410%, bid to cover 4.56x
US markets on close: Dow +0.5%, S&P500 +0.6%, Nasdaq +0.8%, Russell +0.3%
Best Sector in S&P500: Financials and Tech +1%
Worst Sector in S&P500: Utilities -0.1%
At the close: VIX 9.19 (-0.44pts); Treasuries: 2-yr 1.495% (+2bps), 10-yr 2.35% (+2.5bps), 30-yr 2.891% (+2.5bps)
US Market Summary
US equities continued to extend gains today. The S&P 500 closed at a record high, hitting its longest streak of all-time closing highs since 1997. The Stoxx 600 turned positive and the IBEX popped higher after a news report from Spain indicated that Catalan representatives could stall their efforts for independence due to leadership divisions. The Dollar Index approached $94 as Brexit concerns and Canadian trade data weighed on Cable and the Loonie, respectively. The VIX ended down 2%, below the 9.50 level. Tech and financials outperformed, while telecom was in the red.
US Afterhours Movers
SNCR Provides update on strategic alternatives process; enters exclusivity agreement with Siris; +26.0% afterhours
YUMC Reports Q3 $0.52 v $0.55e, Rev $2.04B v $2.00Be (2 est); sets new dividend of $0.10 (1% indicated yield), increases share buyback; +3.5% afterhours
COST Reports Q4 $2.08 v $2.02e, Rev $42.3B v $41.7Be; E-commerce surging; -1.8% afterhours
NLY Files to sell 65M shares of common stock via CS, Merrill, GS, WFC (6.0% of shares outstanding); -2.3% afterhours
